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April 29, 2010

Australian Forcing More Tobacco Company Changes

by Sam Savage

In a world-first move to reduce smoking-related deaths, government sources said that Australia would force tobacco companies to adopt plain packaging, removing all color and branding logos within two years.

The government announced Wednesday the laws that will be enforced by January 2012 prohibit tobacco companies from using any tobacco industry images and promotional text, which was recommended by the World Health Organization.

The government says this move will reduce the attractiveness of tobacco packaging and its potential to mislead young people.

Voters will determine an election this year that is expected to be dominated by health issues after Prime Minister Kevin Rudd struck a deal with state leaders earlier this month to take funding control of health and state-run hospitals.

Rudd holds a solid lead in opinion polls and is expected to win a second term during October's election.

The Australian tobacco market brought $7.60 billion in revenues in 2008, with growth rates showing up at 2.9 percent between that year and 2004.

Smoking-related illnesses kill more than 15,000 Australians every year and smoking has been identified by health authorities as the largest preventable cause of disease and death in the country.

Research shows that industry branding and packaging reduced the effectiveness of graphic health warnings about smoking.

The World Health Organization, in its Framework Convention on Tobacco Control, advises authorities to "consider adopting measures to restrict or prohibit the use of logos, colors, brand images or promotional information."

Government regulations have helped reduced smoking in Australia from 30.5 percent of the population aged 14 and over in 1988 to 16.6 percent in 2007. The government hopes to cut smoking rates below 10 percent by 2018.

The Institute of Public Affairs, a free market think-tank, recently warned that the move to force tobacco companies to sell their products in plain packages could lead to compensation claims over $2.7 billion a year.

It warned that forcing tobacco companies to strip products of trademarks was akin to compulsory acquisition of physical property and could require compensation under the Constitution.